VIRGIN RAISES $159M IN AIRLINE DEAL WITH HNA GROUP

VIRGIN RAISES $159M IN AIRLINE DEAL WITH HNA GROUP

VIRGIN Australia Holdings (ASX: VAH) and China's HNA Aviation Group have inked a new commercial alliance to bolster the carrier's presence within the Chinese travel market.

HNA will make a $159 million equity investment in Virgin Australia in the form of new shares as part of the agreement.

The placement will be issued to subsidiary HNA Innovation for 30 cents apiece, which will boost HNA's total stake in the company to about 13 per cent.

As the airline continues to review its capital structure, HNA has signalled intentions to increase its shareholding to 20 per cent over time.

The Chinese aviation powerhouse will also be nominating a director to the Virgin Australia board under the agreement.

The companies will work to establish direct flights between Australia and China, as well as cooperate on commercial functions including code-sharing, frequent flyer programs, lounge access and promotion of tourism and business travel.

Virgin Australia CEO John Borghetti says the company will invest further into the key market by making the most of its new company ties. 

"We are pleased to welcome HNA as a new shareholder and strategic alliance partner," says Borghetti.

"The alliance will see us leverage the opportunities offered by China as well as the synergies of HNA's comprehensive aviation supply chain."

According to Borghetti, China represents Australia's most valuable inbound travel market, with the total number of inbound passengers increasing by approximately 18 per cent per year since 2010.

The new alliance will be subject to ACCC authorisation, regulatory approvals from Chinese authorities and other commercial conditions before being finalised.

 

Get our daily business news

Sign up to our free email news updates.

 
Whitefox Recruitment founder Luke Hemmings making strides as a careers leader
Partner Content
After relocating his Canberra-founded company Whitefox Recruitment to the Gold Coast la...
Whitefox Recruitment
Advertisement

Related Stories

ASIC secures its first court win for greenwashing against US giant Vanguard

ASIC secures its first court win for greenwashing against US giant Vanguard

The Australian corporate watchdog has caught out one of the world&r...

Medicinal cannabis group Althea shaves $1.5m from its cost base through staff cutbacks

Medicinal cannabis group Althea shaves $1.5m from its cost base through staff cutbacks

Australian-founded medicinal cannabis company Althea Group (ASX: AG...

Charter Hall snares 15pc stake in Hotel Property Investments for $97m from 360 Capital

Charter Hall snares 15pc stake in Hotel Property Investments for $97m from 360 Capital

Listed funds manager 360 Capital Group (ASX: TGP) has offloaded its...

The party’s over: Splendour in the Grass festival cancelled for 2024

The party’s over: Splendour in the Grass festival cancelled for 2024

Splendour in the Grass, Australia’s largest winter music fest...